FIN 571 TUTOR Let's Do This /fin571tutor.com FIN 571 TUTOR Let's Do This /fin571tutor.com | Page 29

Question 22 A ll else equal, the contribution must increase as:
A. Both the sales price and variable cost per unit increase.
B. The variable cost per unit declines.
C. The fixed cost per unit declines.
D. Sales price per unit declines.
E. The sales price minus the fixed per unit increases.
Question 23 A project has an initial cost of $2,250.The cash inflows are
$0,$500,$900,and $700 for years 1 to 4, respectively. What is the payback
period ?
A. 3.92 years
B. 2.84 years
C. Never
D. 2.97 years
E. 3.98 years
Question 24 Ratios that measure a firm’s ability to pay its bills over the
short run without undue stress are known as:
A. Liquidity measures.
B. Asset management ratios.
C. Long-term solvency measures.
D. Profitability ratios.
E. Market value ratios.
Question 25 The discount rate that makes the net present value of an
investment exactly equal to zero is called the:
A. Profitability index.
B. External rate of return.
C. Averages accounting return.
D. Equalizer.
E. Internal rate of return.
Question 26 An interest rate that is compounded monthly, but is
expressed as if the rate were compounded annually, is called the________
rate.
A. Compound interest
B. Stated interest
C. Effective annual